Baylake Corp.
AUDIT, LEGAL & COMPLIANCE COMMITTEE CHARTER

Adopted by Resolution of the Board of Directors
November 18, 2003

General

There shall be a committee of the Board of Directors of Baylake Bank (the “Company”) to be known as the Audit, Legal & Compliance Committee (the “Committee”).

The role of the Committee is to provide assistance to the Company’s Board of Directors in fulfilling its responsibilities to the Company’s shareholders and the investment community relating to corporate accounting, reporting practices of the Company and the quality and integrity of the financial reports of the Company. The Committee will provide such assistance by overseeing:

• the integrity of the Company’s financial statements,
• the Company’s compliance with legal and regulatory requirements,
• the independent auditor’s qualifications and independence,
• the performance of the company’s internal audit function and independent auditor, and
• the Company’s system of disclosure controls and system of internal controls regarding finance, accounting, legal compliance, and ethics that management and the Board have established

The Committee has the authority to obtain advice and assistance from outside legal, accounting, or other advisors as deemed appropriate to perform its duties and responsibilities and the Company shall provide appropriate funding, as determined by the Committee, for compensation to such outside advisers that the Committee chooses to engage.

Composition and Organization

The Committee shall consist of three or more directors as determined by the Board of Directors, each of whom shall be independent of the management of the Company, and free from any relationship that, in the opinion of the Board of Directors, would interfere with the exercise of his or her independent judgment as a member of the Committee. The members of the Committee are to be elected by the Board of Directors and shall serve until their successors are duly elected and qualified. Unless a Chairman is elected by the full Board of Directors, the members of the Committee may designate a Chairman by majority vote of the full Committee membership. A Vice Chairman shall also be appointed to act in the absence of the Chairman.

In determining whether any director is independent, the Board of Directors shall take into consideration the requirements of the principal exchange or system on which any class of the Company’s stock is traded. By way of example, and not limitation, Directors who are affiliates of the Company, or officers or employees of the Company and/or any of its subsidiaries, will not be considered independent.

All members of the Committee must be able to read and understand fundamental financial statements, including a company’s balance sheet, income statement and cash flow statement. The board shall determine whether at least one member of the Committee qualifies as an “audit committee financial expert” in compliance with the criteria established by the SEC and other relevant regulations, reflecting other comparable experience or background, including being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities which results in the member’s financial sophistication. The existence of such member, including his or her name and whether or not he or she is independent, shall be disclosed in periodic filings as required by the SEC.

Meetings

The Committee shall hold regular meetings as may be necessary, generally on a monthly basis, and special meetings as may be called by the Chairman of the Committee. Each regularly scheduled meeting shall conclude with an executive session of the Committee absent members of management and on such terms and conditions as the Committee may elect. As part of its job to foster open communication, the Committee should meet periodically with management, the director of the internal auditing function and the independent auditors in separate executive sessions to discuss any matters that the Committee or each of these groups believe should be discussed privately. In addition, the Committee or its Chairman should meet, either in person or via conference call, with the independent auditors and management on a quarterly basis to review the Company’s financial statements.

Relationship with Internal and Independent Auditors

The Company’s internal auditors and independent auditors are to be ultimately accountable to the Board of Directors and the Committee through regular reporting to and review by the Committee and the Board. The Committee and the Board shall be directly responsible for the performance of the independent auditors, including the authority and responsibility to select, evaluate and, where appropriate, replace the internal auditors or independent auditors (or nominate the independent auditors to be proposed for shareholder approval in any proxy statement.)

Responsibilities and Duties

To fulfill its responsibilities and duties, the Committee shall:

Document/Reports/Information Review

Internal Auditors

Independent Auditors

Financial Reporting Processes and Accounting Policies

Ethical and Legal Compliance

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